Glencore-Xstrata mega-merger could be saved by vote plan

The threatened £44bn mega-merger between commodity giant Glencore and miner
Xstrata could be saved by a move allowing Xstrata’s shareholders to back the
deal - but vote against controversial bonus plans for management.

Monday is the deadline for Xstrata to reveal its decision on Glencore's offer

The two companies are attempting to rescue the merger before Monday’s deadline, by which Xstrata must respond to Glencore’s revised offer for the company, up to 3.05 of its own shares for each Xstrata share, from the original 2.8 bid.

Despite tweaks to retention packages Xstrata planned for its executives – criticised by investors as “pay to stay” bonuses - the £140m of payments remains an issue for many of its investors.

The deal has, however, been structured so that it hinges on shareholders’ approval of these retention payments. Xstrata’s board is reluctant to abandon the packages as it sees them as necessary to retain key staff.

As a result, the new plan under consideration is to let Xstrata shareholders vote on the merger and the payments separately.